Q – What is the private copying levy and why does it exist?

A – The private copying levy is a royalty for music rights holders, such as performers and songwriters that is included in the price of blank CDs, cassettes and MiniDiscs that you buy at your local store. The levy provides a way to compensate music creators when individuals copy music onto blank CDs and tapes for their own listening enjoyment. This additional use is referred to as private copying.

The beauty of the private copying levy is that it addresses the inherent nature of private copying—it provides some compensation to the creators for a use of their work that is indeed private and cannot be monitored.

The levy was established by the Federal Government in 1998. The amount of the first levy was set in 1999. Today it’s 29 cents per CD. Previously, music that was copied onto blank CDs and tapes infringed the creators’ copyright and they, as rights holders, received nothing for this use of their work.

Q – Why do we need the private copying levy?
A – This simple yet important solution became necessary as changes in technology made it easy for millions of Canadians to copy music themselves. When Canadians began copying music they were bypassing paying the creators for this use of their music. The solution, proposed by Canada’s songwriters, performers, record labels and music publishers to the government, was to establish the private copying legislation to address this widespread and un-stoppable violation of copyright.

Q – Who administers the private copying levy?
A – The Canadian Private Copying Collective (CPCC) is the agency responsible for collecting and distributing this specific royalty. The CPCC is made up of a group of collectives that represent rights holders. The member collectives represent all facets of the music industry involved in creating music – singers, songwriters, composers, musicians, music publishers and recording companies. The CPCC’s responsibilities include collecting and distributing private copying levies on behalf of the rights holders; enforcing the Private Copying Tariff; and representing its members before the Copyright Board of Canada, where it is decided which media will have a levy and at what rate.

Q – What’s the problem with the current private copying levy?
A – Currently, the law provides some compensation for private copying of music – but only for copies that are made on audio cassettes, MiniDiscs or CD-Rs. The levy is charged on the sale of these specific types of blank media, and that revenue is distributed to music rights holders – about $30 million a year was distributed in the years 2005 to 2008 and $25 million was distributed in 2009. As the use of CD-Rs and cassette tapes continues to rapidly decline, this source of revenue for rights holders will disappear very quickly. The amount available for distribution from levies collected in 2009 has dropped around 30% from the previous year and this trend is anticipated to increase.

Q – What will happen if the levy isn’t updated?
A – The private copying levy has put over $180 million in the pockets of over 97,000 songwriters, composers, musicians and other rights holders. But with very few people still using audio cassettes and MiniDiscs, the money flowing to artists from the levy is heading for extinction. Simply put, without this important change to the private copying levy, many music creators will not be able to continue their careers.

Q – Isn’t this just another tax on consumers?
A – No, taxes go to governments. The private copying levy is compensation to artists for the use of their work.

Q – How much will the levy cost consumers?
A – The Copyright Board holds public hearings to set the amount of the levy. Factors are considered such as how much private copying is done on different blank audio recording media like CDs, and the value of a copy of the music. The Board then decides which media should have a levy, and sets the monetary value of the levy for each type of media. The levy is adjusted as copying technologies and habits evolve and as the value of the copying changes.

Q – But I’ve already bought the music, why do I have to pay again and again?
A – When you purchase a pre-recorded CD of your favourite artist, you are purchasing that specific copy of the music – you have not purchased the rights to the music. If you wish to make a copy, rights holders deserve to be compensated for the value of that copy. The private copying exemption in the Copyright Act legalizes the making of the copy and the levy is how rights holders receive payment.

Q – I don’t copy music why should I have to pay a levy?
A – The levy is attached to the media that is ordinarily used by Canadians to make private copies. Of course, there are other ways to use the media other than to copy music, and the Copyright Board reduces the levy rate to take this into account. As there is no way to know which CDs will be used for the copying of music and which will be used in other ways, the levy is applied and collected on all blank CDs purchased in Canada, at the discounted rate .

Q – I’m a musical artist, why haven’t I’ve received any money from the levy?
A – The CPCC encourages all artists to contact the CPCC member collective that represents them to inquire about any private copying levies that may be owing to them.

Q – How is the payout to artists determined?
A – As there is no way to know exactly what music Canadians are copying, the private copying royalties are determined by proxy. The royalties are split 50/50 between radio airplay and music sales for the year the money was collected. For a more detailed description, please see the CPCC’s website.

Q – Won’t the levy just drive people to the US to buy digital devices?
A – The levy on digital devices will be reasonable. When the levy was applied to digital audio recorders in 2004, the levy ranged between $2 and $25 depending on the capacity. If those levy rates were collected today, that means a 32GB iPod Touch, which retails for $297.99, would cost $322.99.

Q – What about film and TV, why is there no levy for audio visual artists?
A – ACTRA is working towards establishing the same rights for audio-visual performers both internationally and in Canada. At this point, the Canadian private copying levy only applies to audio recordings. In the future, that could change.